Charter said to hinder PH bid to join crucial bloc

Restrictions in the economic provisions of the Philippine Constitution may hamper the country’s bid to be part of the Trans-Pacific Partnership (TPP), where the country can have a trade agreement with one of its largest trading partners.

Being part of the TPP is deemed crucial for the Philippine export industry. For local exporters, missing out on the TPP will mean a loss of a significant share of the US market to other emerging markets in Asia.

This is why the Philippines may seek for “flexibility” that will allow it to comply with the agreements stipulated under the TPP without having to amend the Constitution, if and when it is invited to be part of the second round, explained Trade Secretary Gregory L. Domingo.

This flexibility is necessary since the official stand of President Aquino is that he will not allow any changes to the Constitution, he added.

“The TPP is an avenue for us to get access to broader markets primarily, the United States. It is something we have to engage in. We have no choice because the US is our second or third largest trading partner. Many of our neighbors will become members of TPP. If they have duty free access, for example, to the US and we don’t, it will really handicap the Philippines and affect us in a very significant way. So, even as a defensive measure, it’s something that we have to really try to get in,” Domingo stressed.

“Our problem is that we have limitations in the Constitution that may not meet the standards required [of] TPP members. So, we may have to ask for flexibility from TPP at some point, if and when they invite us, to be able to comply with those [requirements] over a period of time,” the trade chief added.

Such limitations include restrictions in foreign ownership of land, businesses, services and practice of profession, among others, Domingo further said.

Despite such limitations, the Philippines remains keen in pursuing its bid.

At present, the 12 members of TPP—the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam—are still in the thick of negotiations for a multilateral agreement that will, among others, lower trade barriers among the participating countries. The regional pact also aims to strengthen patent protection.

The Philippines first expressed its interest to be part of the TPP in mid-2010, when President Aquino took office.

“We need to be invited [to be part of the TPP], but they’re not ready to invite yet. The 12 members are still crafting the agreement. I think the preference is to complete the negotiations before they invite new members,” Domingo said.

“It now depends on how fast the 12 TPP members can come up with an agreement, and when they will open up for membership. Because, as soon as it opens up, we will have some serious discussions with them on whether the Philippines can join,” Domingo added. “They’re trying to complete the agreement by next month, so we’ll see.”